Why Americans Are Drowning in Medical Debt

By Olga Khazan for The Atlantic:

After his recent herniated-disk surgery, Peter Drier was ready for the $56,000 hospital charge, the $4,300 anesthesiologist bill, and the $133,000 fee for orthopedist. All were either in-network under his insurance or had been previously negotiated. But as Elisabeth Rosenthal recently explained in her great New York Times piece, he wasn’t quite prepared for a $117,000 bill from an “assistant surgeon”—an out-of-network doctor that the hospital tacked on at the last minute.

It’s practices like these that contribute to Americans’ widespread medical-debt woes. Roughly 40 percent of Americans owe collectors money for times they were sick. U.S. adults are likelier than those in other developed countries to struggle to pay their medical bills or to forgo care because of cost.

California patients paid more than $291,000 for the procedure, while those in Arkansas paid just $5,400.
Earlier this year, the financial-advice company NerdWallet found that medical bankruptcy is the number-one cause of personal bankruptcy in the U.S. With a new report out today, the company dug into how, exactly, medical treatment leaves so many Americans broke.

Americans pay three times more for medical debt than they do for bank and credit-card debt combined, the report found. Nearly a fifth of us will hear from medical-debt collectors this year, and they’ll gather $21 billion from us, collectively.

Types of Debt Collected From Consumers in 2013
NerdWallet analysis of Ernst & Young’s analysis of third-party debt collection

The company also found that 63 percent of Americans have received a medical bill that was more than they expected to pay. Some of that is a result of hospital errors: Nearly half of the Medicare insurance claims NerdWallet examined contained billing mistakes.

Another contributing factor is that hospitals charge wildly different amounts for the same procedures. In the most extreme example NerdWallet analyzed, the highest charge for an inpatient stay for severe intestinal bleeding was 54 times higher than the lowest charge. At most, California patients paid more than $291,000 for the procedure, while those in Arkansas paid just $5,400.

It’s worth noting that the Affordable Care Act’s individual mandate and Medicaid expansion might alleviate some of this debt strain over the coming years. But otherwise, patients have few options beyond attempting to research hospital charges ahead of time—which is probably the furthest thing from a person’s mind when they are most in need of a hospital.


  1. John "Hai" Knapp on October 29, 2014 at 4:53 pm

    Another reason I support HR-676 single-payer. If the doctor makes a mistake with me, in our current set-up I had better sue for future medical expenses resulting. But, if access and the funding is a guarantee, I will probably sue for lost wages and pain, but not future medical debts. As a supporter of single-payer HR-676 I am not unrealistic to believe healthcare will ever really be free; but I believe we should pay for it like we pay for the police, public schools, dept of roads, and etc.
    The answer is NOTHING BUT THE SINGLE-PAYER https://www.youtube.com/watch?v=SNSbVYcAe-E

    • Alice Ann Stern on October 30, 2014 at 6:18 pm

      If you think medical malpractice is an alternative to good medicine, where doctors are constantly evaluated & graded by an independent body of professors of medicine, you’re barking up the wrong tree. #1: Lawyers will only take the most easiest and obvious cases, where they can optimize the highest compensation. #2: Every hospital, especially the prestigious university hospitals, employ thousands of lawyers to prevent patients from suing them. More often than not, lawyers will deliberately hold onto cases until a few weeks before the statute of limitations runs out or lawyers just will refuse to take your case. Just like the attorneys general across the country are bribed not to investigate, so to are malpractice law firms bribed not to take cases by the prestigious university hospitals.

  2. John "Hai" Knapp on October 29, 2014 at 4:57 pm

    Song, Hymn parody (tune – Nothing but the Blood of Jesus)
    1>Stay insured though your job goes?
    Nothing but the single-payer
    Find another job, who knows?
    Nothing but the single-payer

    Ch> How precious is the day
    When universal care comes our way
    H R 6 7 6 will stay!
    Nothing but the single – payer

    2> Got sick, can’t work, can’t pay for care?
    Nothing but the single-payer.
    Stay insured, and this plays fair?
    Nothing, but the single-payer.

    3> To know you’re covered, you are in,
    nothing but the single-payer
    “pre-existings” no problem,
    Nothing but the single-payer

    4> Stay insured when you need most,
    nothing but the single – payer.
    We pay into pool that has our host
    Nothing, but the single – payer

  3. Carla Skidmore on October 29, 2014 at 7:17 pm

    Why are we the only nation where our citizens are hampered by debts that are incurred due to needed medical care. What is wrong with us? What is wrong is a congress that is bought and paid for by the insurance companies. Oh, yes, my friends, we have the best congress that money can buy.

  4. bill shaver on December 18, 2014 at 8:15 am

    YA GOTTA LOVE THAT SONG…HOWEVER…SINGLE PAYER WITH DO AWAY WITH THE TRIAL LAWERS & MUCH OF MALPRACTICE, as with it your heath office will hire odle of staff to oversee the implementation, along with the heathcare card, with your picture & biometric print on it along with your file, this card you will present when visiting doctor, hospital 7 pharmay…al records will be scrutinized to weed out fraud at doctors, hospital & pharmacies…. yes oversight with security…but all for you & to make sure all others are doing the appropriate thing luike living up to HIPOCRATIC OATH sowrn to uphold by doctors & pharmacists.. alike…so all this medicare fraud that fill the airwaves …will be another of the past….along with medical bankruptcies ….and being refued coverrage..etc, etc,,, doctors under more scrutiny will do away with most pill poppers…and follish behavior by all….